from the with-friends-like-these dept

While T-Mobile has certainly brought some welcome changes to the wireless industry (including a CEO with a rare sense of humor), the consumer-friendly brand they've established has consistently fallen short when it comes to one major subject: net neutrality. The company lobbied and fought consistently against the reclassification of ISPs as common carriers and the creation of net neutrality rules. The operator then pissed off much of the internet when CEO John Legere mocked the EFF for raising questions about the misleading nature of the company's zero rating and throttling practices.

This week, the company again made its opposition to net neutrality clear. Speaking at a media and telecom conference, T-Mobile CFO Braxton Carter applauded the incoming President-elect Donald Trump, whose telecom transition team members have all made it abundantly clear that eliminating net neutrality rules and gutting the FCC as a consumer watchdog will be among their top priorities. This is, T-Mobile claims, going to be a real "positive" for the industry:

"It’s hard to imagine, with the way the election turned out, that we’re not going to have an environment, from several aspects, that is not going to be more positive for my industry,” Carter said in comments this morning at the 44th Annual Global Media and Communications Conference. “I think that it’s very clear that there’s going to be less regulation. And less regulation—regulation often destroys innovation and value creation."

"Carter also specifically addressed the issue of net neutrality, arguing that the reversal of the FCC’s Open Internet rules would pave the way for additional innovation in the space. “It would provide the opportunity for significant innovation and differentiation,” Carter said of a telecom industry without net neutrality rules. “You could do some very interesting things” without net neutrality."

Carter appears excited about "deregulation" because it might lower T-Mobile's tax burden and increase its chances of merging or being acquired. But his excitement is shortsighted and fairly typical for executives in the telecom sector.

The problem is that in telecom, "deregulation" (of the sort promised by folks like Trump advisor Jeff Eisenach) doesn't actually mean straight deregulation. What it means in practice is pay-to-play regulation, where the biggest and most politically powerful companies (usually AT&T or Comcast) get to literally write the law. That's why you'll often see these folks breathlessly proclaim they adore "open markets," yet turn a blind eye when AT&T or Comcast write protectionist state law that hamstrings local communities and keeps competitors at bay.

In telecom, "deregulation" is all-too-frequently code for "let's let AT&T and Comcast decide what's best." That was the preferred mantra of former FCC boss Michael Powell (now the cable industry's top lobbyist), who also shared Jeffrey Eisenach as a transition team member. The end result of that administration was "deregulation" that wound up empowering AT&T and Comcast, making broadband less competitive and customer service worse than ever. We've apparently decided to collectively forget that.

As such, when your biggest competitor is AT&T, cheering for the one regulator that has tried to ensure a level playing field for smaller competitors seems a bit myopic. Remember it was the FCC and DOJ that blocked AT&T's attempted acquisition of T-Mobile, which ultimately resulted in T-Mobile being a more innovative, fierce competitor than ever before. Again, every indication coming from Trump's telecom transition team and the GOP is that they hope to completely defund and defang the FCC. That means more mergers, less competition, less innovation, and more net neutrality violations than ever before.

T-Mobile has repeatedly tried to downplay its opposition to net neutrality by claiming that the company is on the "right side of history" as it fights neutrality rules with broad, bipartisan support among consumers. But the company's enthusiastic support for the gutting of nearly all consumer protections in the broadband space make it clear, once again, the brand's dedication to consumers and "innovation" is entirely and unsurprisingly superficial.

from the abusing-the-dictionary dept

For the better part of the last decade, wireless carriers have had an often vicious, adversarial relationship with the dictionary. More specifically, they've struggled repeatedly with the definition of the word "unlimited," often pitching data services that proclaim to be unlimited, only to saddle users with onerous, often confusing restrictions. For the last decade, regulators have tried to cure them of this behavior, from Verizon paying $1 million to New York's Attorney General in 2007, to the FCC fining AT&T $100 million last year.

Yet despite repeated warnings, the problem persists. Case in point: this week the FCC announced it had struck a $48 million settlement with T-Mobile (pdf) for advertising unlimited data plans without making it clear the limitations of these connections. More specifically, the FCC says T-Mobile didn't clearly inform consumers that these "unlimited" lines would be throttled during periods of network congestion, or after users consumed 17 GB of data in any given month:

"The FCC’s investigation found that company policy allows it to slow down data speeds when T-Mobile or MetroPCS customers on so-called “unlimited” plans exceed a monthly data threshold. Company advertisements and other disclosures may have led unlimited data plan customers to expect that they were buying better and faster service than what they received. The Commission’s 2010 Open Internet transparency rules require broadband Internet providers to give accurate and sufficient information to consumers about their Internet services so consumers can make informed choices."

All told, T-Mobile will pay a $7.5 million fine and dole out $35.5 million in "consumer benefits" (mostly just minor discounts on select hardware and plans) from T-Mobile and its prepaid subsidiary MetroPCS. This will, the FCC insists, surely teach T-Mobile a lesson about marketing unlimited data tiers that aren't:

"Consumers should not have to guess whether so-called ‘unlimited’ data plans contain key
restrictions, like speed constraints, data caps, and other material limitations,” said FCC Enforcement Bureau Chief Travis LeBlanc. “When broadband providers are accurate, honest and upfront in their ads and disclosures, consumers aren’t surprised and they get what they’ve paid for. With today’s settlement, T-Mobile has stepped up to the plate to ensure that its customers have the full information they need to decide whether ‘unlimited’ data plans are right for them."

While this sounds superficially nice, there are a few problems with the FCC's move here. For one thing, the FCC has been making it abundantly clear that it's ok to sell "unlimited" plans with all manner of misleading limits -- you just have to make sure your marketing fine print makes those limitations clear. And while that's good, these kinds of wrist slaps clearly aren't working. And just ensuring transparency is not the end of this particular conversation.

For example, T-Mobile's and Sprint's newest plans, which the FCC hasn't raised a peep about, offer users "unlimited" connections, but throttle all games, video and music unless users shell out a monthly premium if they actually want these services to work as intended. That's a fairly obvious violation of net neutrality principles and an abuse of the word "unlimited," yet the FCC has made it abundantly clear it thinks this sort of behavior is perfectly ok. In other words, you can be a misleading cheat. You just have to make it clear you're a misleading cheat via fine print in your three-hundred page terms of service.

We've noted repeatedly how the FCC simply refuses to acknowledge how usage caps and zero rating are causing significant problems, and it doesn't look like it's an issue that's going to get fixed anytime soon. While current FCC boss Tom Wheeler's pro-consumer bent was a surprise to many (especially given his cable and wireless lobbying past), there are growing signs that his tenure will be up at the end of the year. And given the particular leanings of both Trump and Clinton, there's certainly no guarantee his replacement will have the political courage to stand up for consumers and finish what Wheeler started.

from the words-no-longer-have-any-meaning dept

While T-Mobile has certainly done some good things for the wireless industry, the company's ongoing tone deafness on net neutrality isn't doing the carrier any favors. T-Mobile fought against real net neutrality rules, then, once passed anyway, got right to work trying to find creative ways around the rules using zero rating (exempting only some content from usage caps). When net neutrality advocates and scholars repeatedly pointed out T-Mobile was violating net neutrality and being a bit hypocritical ("we're edgy and love consumers but not real net neutrality!"), the company dug a deeper hole by attacking groups like the EFF.

Last week T-Mobile upped the ante with new plans that promise "unlimited" data, but are not only more expensive, they throttle tethering, throttle overall consumption at 26 GB, and throttle all video to 1.5 Mbps or 480p. Users who want HD video to actually work correctly can apparently pony up $25 more per month. Emboldened by T-Mobile and a (so far) apathetic FCC, Sprint revealed similar "unlimited" data plans of its own, which throttle all video, games and music to 1.5 Mbps, 2 Mbps, and 500 kbps respectively, unless you pony up another $25 per month.

Groups like the EFF were quick to point out that installing ISPs as middlemen who get to determine how well your services work based on how much you pay in a marginally-competitive broadband market sets a horrible precedent. If regulators allow T-Mobile to charge more money for HD video to work, what stops Comcast from charging you more if you want 4K Netflix streams to work? Or AT&T deciding it can charge you more if you want your Steam games to download at full bitrate? This is a door that, once opened, won't be easily closed. And once this practice is a standard, it will be abused.

T-Mobile, for whatever it's worth, continues to be annoyingly tone deaf about the slippery slope it's dragging the entire industry toward. However bad zero rating was, the act of throttling entire classes of traffic unless you pay your ISP more money is notably worse. Highlighting how video conferencing isn't throttled but YouTube is, The Verge tried to get T-Mobile to define "video" and "data" but came away stymied:

"I asked T-Mobile for the company’s definition of "data" and a spokesperson said "that’s not something I could give you," but suggested that the company was on "the right side of history," and that the goal was to make "unlimited sustainable for the mass market." That’s an admirable goal! But let’s not dance around the fundamentals of the situation. Net neutrality is the law of the land, and T-Mobile has aggressively pushed the boundaries of net neutrality by manipulating the traffic on its network."

But again, violating net neutrality principles isn't the same as violating net neutrality rules, and the FCC's rules were carved out with numerous exeptions that allow all manner of throttling -- provided ISPs claim it's for the health of the network. That's why T-Mobile frames this as a matter of "sustainability," even though it's really about adhering to basic dictionary definitions and not selling an "unlimited" service if you're not actually willing to offer it. For a company that markets itself as a pro-consumer alternative to traditional wireless carriers, T-Mobile seems increasingly hell bent on continuing some of the industry's worst habits.

from the so-much-for-net-neutrality dept

While the United States' net neutrality rules are certainly better than nothing, we've noted a few times how they contain enough loopholes (and ignore enough hot button topics) as to be more than a little problematic. More specifically, they contain so much wiggle room they let ISPs of all stripes violate net neutrality -- just so long as they're a bit more creative about it. Verizon and Comcast were quick to highlight this when they began cap-exempting their own content, while still penalizing their competitors (without so much as a real peep from the FCC).

T-Mobile pushed these creative barriers further with Binge On, which exempts only the biggest and most popular video services from the company's usage caps (aka "zero rating"). This automatically puts thousands of smaller video providers, non-profits, educational institutions and startups at a notable market disadvantage, but by and large nobody outside of the EFF and academia seems to give much of a damn because a: ill-informed consumers are happy laboring under the illusion that they're getting something for free and b: the public (and by proxy media) is lazy and tired of debating net neutrality.

But the door being opened here leads to a monumental, potentially dangerous shift not only in how broadband service is purchased and sold, but in just how open the internet of the future is going to be.

Last week T-Mobile moved the bar even further with its new T-Mobile One plan, which provides 'unlimited' data, voice and text messaging for $70 per month. Users generally don't like the plan because it's technically more expensive than T-Mobile's previous plans. But it's also saddled with caveats, such as the fact that tethering (using your phone as a modem or hotspot) is throttled to 128 kbps, 'unlimited' technically means 26 GB, and by default all user video is throttled to 480p or 1.5 Mbps by default. Unless users pay T-Mobile a $20 monthly surcharge for HD quality.

Emboldened by T-Mobile and an utterly comatose FCC, Sprint has taken this idea even further, last week unveiling its own not-really-unlimited "Unlimited Freedom" plan with its own set of annoying caveats. Tethering is forbidden, "unlimited" actually means about 23 GB before your full connection is throttled, and by default all video is throttled to 1.5 Mbps, all games are throttled to "up to 2mbps" and all music streams are throttled at "up to 500kbps." That's a god-damned generous definition of unlimited by any measure.

But rejoice, this week Sprint came up with a "solution" for customers who, you know, would like all the services they use to actually work. The company has announced a new "Unlimited Freedom Premium" plan that raises all these arguably arbitrary limits -- if you're willing to shell out an additional $25 per month:

"This plan provides a premium quality mobile streaming experience with HD streaming videos at up to 1080p+, HD music streaming at up to 1.5 Mbps and streaming gaming at up to 8 Mbps."

Again, so we're clear: this is an ISP forcing users to pay more money if they want the services they consume to actually work properly. That's the exact sort of thing net neutrality rules were supposed to prevent. Yet here we are, dancing on a slippery slope, staring down an incredibly fractured, confusing, and potentially exploitable new paradigm for the already uncompetitive broadband sector. And frankly, nobody seems to give all that much of a shit. Either because they're bored of paying attention, or they can't see a few plays ahead on the chess match between net neutrality advocates and large ISPs.

If Sprint and T-Mobile can charge users premium to avoid video, game and music throttling, what prevents Comcast from charging users a premium if they want 4K video streaming to actually work? What stops AT&T from charging users a premium if they want their Steam games to download at full speed? The answer? Nobody, apparently, since the FCC has made it abundantly clear it believes that usage caps, zero rating, and pay-to-avoid-throttling schemes are just creative market experimentation. Except the only creativity on display here involves marketers convincing consumers to root against their own best, self interest.

As noted above, net neutrality violations are still perfectly legal here in the States, you just need a little creative showmanship when shafting the consumer. The FCC's Open Internet Order (pdf) is chock-full of "rules" that don't apply if you provide a bullshit-laden technical justification about how you're only throttling "for the health and security of the network." But congestion has always been used by the telecom industry to justify all manner of bad behavior, including unnecessary usage caps on captive customers. And regulators and the press can rarely be bothered to fact check these congestion claims (remember the exaflood?).

And while spectrum constraints on wireless networks are certainly real, that's no justification for the sea change. If your network can't actually handle unlimited data? Either raise prices transparently to pay for the necessary upgrades, or stop marketing "unlimited" services. What we don't want is the telecom sector with a generation of documented anti-competitive behavior under its belt dictating just how well services perform based on how much users are willing to pay. Because make no mistake, without vibrant, organic market competition (which is only marginally better in wireless) they will abuse the concept like an insatiable swarm of termites.

Initially, I assume both T-Mobile and Sprint will try to argue that this isn't that big of a deal, because users can always switch to metered plans that don't involve charging you more money for un-throttled services. At least until those other plans quietly disappear over a period of months, and paying a premium to actually use content the way it was intended is all the consumer has to choose from. And given that the majority of the public has no idea what a gigabyte even is, these new caveats and the horrible precedent they set will fly (and are clearly flying) right over their collective heads.

I understand that net neutrality is a convoluted and hyperbole-heavy debate that has gone on for more than a decade. As such there's clearly plenty of people happy to labor under the illusion that last June's FCC net neutrality win was the end of the conversation and they can take a nap. It's not, and they can't. We'll be fighting for an open internet for as long as ISPs keep trying creative ways to abuse the lack of last-mile broadband competition. In other words, forever.

from the bad-precedent dept

For some time now T-Mobile has been accused of violating net neutrality by exempting the nation's biggest video services from its usage caps, and throttling all video on the network by default to 1.5 Mbps or 480p. Net neutrality advocates have repeatedly warned that giving some content or companies a leg up and fiddling with service quality sets a horrible precedent, and research has shown T-Mobile's system to be unreliable and exploitable. Still, T-Mobile has so far received applause from many regulators, media outlets and customers operating under the belief consumers are getting something for free.

As such, however bad the precedent being set here, there's no real political pressure on the FCC to act since consumers are effectively applauding what many believe to be a net neutrality violation. The FCC's net neutrality rules don't specifically prohibit zero rating, something we've long argued opens the door to creative abuses of net neutrality to thunderous applause, which is effectively what's happening here. The rules do require the FCC to explore whether zero rating is anti-competitive on a "case by case" basis, but so far, outside of a few letters, the FCC doesn't seem particularly pressed to take action.

Last week, T-Mobile introduced a new wrinkle to the entire saga by unveiling a new plan named T-Mobile One. Under T-Mobile One, users get "unlimited" data (technicaly 26 GB, after which you're throttled to 128 kbps), text and voice for $70 per month. But under this new plan, users find all video services throttled by default to 1.5 Mbps or 480p. If you want to stream video at any higher rate, you'll need to pony up an additional $25 per month. Groups like the EFF were quick to argue that the new plans still violate net neutrality:

"From what we’ve read thus far, it seems like T-Mobile’s new plan to charge its customers extra to not throttle video runs directly afoul of the principle of net neutrality," said EFF senior staff technologist Jeremy Gillula.

Right, but violating net neutrality principles and net neutrality rules is not the same thing. It's generally believed the FCC didn't crack down on T-Mobile's original plans because the FCC's Open Internet Order (pdf) not only didn't ban zero rating, but it stated that some throttling is ok if it's "a choice made by the end user." Because users could opt out of T-Mobile programs Binge On and Music Freedom, T-Mobile had creatively managed to inhabit an area not really outlawed by the agency's net neutrality rules.

...Gillula argues that the throttling of all video might violate the rule, despite the option to pay for high-speed video. He pointed to a sentence later in the same paragraph that says, "if a broadband provider degraded the delivery of a particular application (e.g., a disfavored VoIP service) or class of application (e.g., all VoIP applications), it would violate the bright-line no-throttling rule."

"If you just substitute 'video' in for 'VoIP,' it's pretty clear that the FCC's intent was to prevent discriminatory throttling, even if the user could pay to avoid it," Gillula told Ars. "In other words, the FCC (and EFF) are just fine with ISPs offering different tiers of service, as long as the tiers don't discriminate against different types of content. But that's precisely what T-Mobile is doing here—discriminating against data based on its content."

Given past statements one gets the sense that the FCC isn't all too worried about the obvious, problematic impact usage caps and zero rating may have on the open Internet. But we're quickly getting to the point where the FCC needs to at least help detail where the line is drawn, one way or another. T-Mobile's experiments last week resulted in Sprint unveiling similar "unlimited" data plans of their own, which also throttle all video to 480p by default unless you pay a premium for higher resolution. But you'll note Sprint goes even further:

Unlimited Freedom utilizes optimization for streaming video, gaming and music, delivering a high-quality viewing experience for mobile devices with video streams of up to 480p resolution, gaming up to 2mbps and music streams at extreme quality of up to 500kbps.

If you'll pause with me at the very top of this long and slippery slope and look down, folks with even the faintest tea leaf reading ability should be able to envision one possible future where all broadband access is fragmented and fractured in just this fashion, users paying more or less for varying qualities of different content and services. This was, if you'll recall, the sort of thing net neutrality rules were designed to help us avoid. T-Mobile opposed Title II and real net neutrality rules for obvious reasons, and groups like the EFF (quite correctly) worry T-Mobile is now happily chipping away at the very foundation of an open internet...to thunderous public applause.

from the tomato,-tomahto dept

For years T-Mobile has been making some welcome changes to U.S. wireless service, implementing everything from free data while roaming internationally, to rollover data plans that let you keep unused data. T-Mobile's strange, new tactic of treating consumers well has paid incredible dividends for the company, which has been adding significantly more postpaid wireless subscribers per quarter than any other major carrier. Between the elimination of consumer pain points and its foul-mouthed CEO, T-Mobile's been a welcome change for the sector (just ignore its attack on the EFF and failure to support net neutrality).

This is of course in stark contrast to Verizon Wireless, which has desperately been trying to avoid competing with T-Mobile on price, even proudly proclaiming that it's happy to kick "price sensitive" customers to the curb.
The carrier's primary tactic has been to claim that the company offers such an incredible wireless experience," it doesn't need to compete on price. But as T-Mobile has gained ground and improved its own network, that tactic has started to falter.

"On Wednesday, Verizon overhauled its main offerings for monthly customers, increasing most data allowances by 33%, adding a rollover feature for unused data and cutting prices for using phones in Mexico and Canada. But it also raised its standard monthly charges on all the new plans by as much as 17%. For example, a 6 GB plan that cost $60 per month will be replaced by an 8 GB plan that costs $70.

So you'll get a bit more data, but you'll continue to pay a steep premium for it. Keep in mind that Verizon's wireless data prices were already some of the highest in the industry. Also realize that Verizon carefully analyzes customer usage patterns and designs their shared data plans to drive as many customers as possible to the more expensive plans. One of the biggest benefits of such shared data plans for carriers? Most consumers have no idea what a gigabyte even is. As such, they sign up for bigger, more expensive plans they likely don't need -- just to avoid the hassle of worrying about overage fees.

This being Verizon, the company was quick to claim that charging 17% more wasn't a price hike, clinging tightly to the narrative that it doesn't have to compete on price because it's just that awesome:

"But Verizon executives say that customers will pay for the increased data allowances and superior quality of their network. "Customers are using more and more data on our network,” Nancy Clark, senior vice president for marketing and operations, said in an interview with Fortune. “We needed to build bigger data plans and the value is better than ever.”..."This is in no way a price increase,” Clark added."

To try and counter the price hikes that aren't price hikes, Verizon made a number of other changes to the way its wireless plans work, including offering a new "safety mode" where users can avoid overage fees, but have their connections throttled back to 128 kbps (for an extra $5 a month). The carrier also unveiled a new rollover data option (which Verizon last year breathlessly declared it wouldn't follow T-Mobile on). But in very Verizon fashion, the company made a number of changes to the way rollover data is supposed to work in order to make it less useful for consumers:

"In addition to the price and allotment changes, Verizon's also following T-Mobile's lead in offering "Carryover Data," a rollover data plan that lets you forward unused data to the next month. But like AT&T's version Verizon has muted the benefit of the idea by forcing users to burn through their existing allotment before being able to touch your carried over data allotment -- and by making the data expire if you don't use it in a month."

In other words, Verizon Wireless' attempt to compete with T-Mobile involves raising prices and copying a bunch of ideas T-Mobile implemented years ago -- then somehow magically making them worse. Watching Verizon Wireless try and "compete" is much like watching a rhinoceros do the electric slide -- it's just too foreign a concept to ever really seem natural.

from the the-controversy-that-wasn't dept

Last month, you might recall that Netflix found itself at the center of some "controversy" after it admitted it was throttling AT&T and Verizon customer Netflix streams to 600 kbps. At the time, the company stated it was only doing so to help out customers on metered usage plans. Netflix also stated that it wasn't throttling the streams of Sprint and T-Mobile users, since "historically those two companies have had more consumer-friendly policies" (read: still offer unlimited data plans).

The cable industry and net neutrality opponents quickly tried to claim Netflix's admission meant the company was a hypocrite on net neutrality, with some even calling for an "investigation." The telecom industry's PR push was short lived however, given most people realized that Netflix was actually trying to help consumers out, and it's kind of odd to punish a company for technically throttling its own service. At the end of the day, the consensus was that the only real thing Netflix did wrong was not being fully transparent about what it was doing, and why.

Fast forward to this month and Netflix says it has now released a tool that will let users control themselves whether their stream is throttled, and how much. According to a company blog post, all users on mobile plans will now be throttled to 600 kbps, though you'll have the option of changing that in the settings of the latest version of the app, including setting it to unlimited streaming. Notes Netflix:

"The default setting will enable you to stream about 3 hours of TV shows and movies per gigabyte of data. In terms of bitrates, that currently amounts to about 600 Kilobits per second. Our testing found that, on cellular networks, this setting balances good video quality with lower data usage to help avoid exceeding data caps and incurring overage fees. If you have a mobile data plan with a higher data cap, you can adjust this setting to stream at higher bitrates. Our goal is to give you more control and greater choice in managing your data usage whether you’re on an unlimited mobile plan or one that’s more restrictive."

So, the story ends with Netflix giving consumers a tool to manage their own usage, and being totally clear about what they're doing, which should make everybody happy, right? Not so much. Net neutrality opponents at TechFreedom were quick to blast the media with a press release trying to claim that Netflix was being held to a different standard:

"Three cheers for Netflix for user empowerment, but there’s no principled reason why broadband operators shouldn’t be able to give users the same option,” said Berin Szóka. “The rhetoric for ‘net neutrality’ has always been about user empowerment. But the FCC wound up writing a hard-line rule that seems to completely ban broadband providers from adjusting video quality even if users want that. That’s crazy. It means consumers won’t get the kind of master interface that can manage quality across all video platforms — which, in turn, would make ordinary users comfortable experimenting with multiple video platforms."

That is, unfortunately, a very confused interpretation of what net neutrality actually is. Net neutrality rules are only necessary in telecom due to the lack of competition. Without competition, ISPs can use their monopoly over the last mile to hinder competitors or competing services (of which there are numerous examples), or to give their own services an unfair market advantage (something both Comcast and Verizon are currently doing with zero rating and usage caps). Users can, in stark contrast, stop using Netflix should they find the company engaging in anti-competitive behavior.

Ever since Netflix started speaking out about things like usage caps and net neutrality, the company's been targeted by the telecom industry and its loyal allies as the very worst sort of villain. In this case, the difference between Netflix trying to help capped users and ISPs using a lack of competition to unfair advantage -- should be night and day to most people. Unless of course you're desperately clinging to the false narrative that net neutrality isn't a real issue, and think a generation of easily documentable anti-competitive behavior on the part of incumbent ISPs is some kind of mass hallucination.

from the sometimes-a-duck-is-still-a-duck dept

Last year you'll recall that T-Mobile launched its "Binge On" zero rating program, which exempts the biggest video services from the company's usage caps (aka "zero rating"). Net neutrality advocates quickly complained that the practice violated net neutrality, since the very act of giving some companies an advantage automatically disadvantages some others. After T-Mobile spent some time lying about the nature of the program, the EFF came out with a detailed report noting that T-Mobile was just throttling all video files back to 1.5 Mbps, whether the content was being streamed or directly downloaded.

Net neutrality advocates like the EFF argued that the program at the very least should be opt in instead of opt out, concerns that T-mobile continues to ignore. YouTube similarly initially complained about the program and that video partners were being throttled by default. But in a matter of months, Alphabet/Google appears to have completely changed its mind, issuing a new blog post that says it's now partnering with T-Mobile to zero rate Google Play Movies and YouTube content traveling over the T-Mobile network.

According to YouTube, T-Mobile made a number of changes to Binge On that satisfied YouTube's concerns, including new "short codes" that let users more easily opt out. T-Mobile also apparently was willing to listen to YouTube's concerns about throttling partner services by default with no dialogue between companies:

"While T-Mobile has always stated that any video service can join the program at no charge, prior to our discussions, video services were not given a choice about whether their streams would be managed by T-Mobile if they did not join the program. Going forward, any video service meeting traffic-identification requirements will be able to opt-out, and T-Mobile will stop including them in the Binge On program and will no longer modify their video streams. In addition, T-Mobile will now work with video services that wish to optimize their own streams, using an average data rate limit. This allows video services to offer users an improved video experience, even at lower data rates, by taking advantage of innovations such as video compression technology, benefiting T-Mobile, their customers, and video providers.

To be clear it's good that T-Mobile is being slightly more transparent, even though it lied pretty consistently about what it was actually doing in the first place. It's also great that the company is providing better, simpler opt-out tools for consumers (dial #263# to turn Binge on off, and dial #266# to turn it on again). And it's also a major improvement that T-Mobile's letting video service providers opt out, while giving companies more control over precisely how video traffic is managed. The problem is that none of this solves the core problem with zero rating: the horrible precedent set by zero rating in the first place.

The superficial consumer lure of "free data" overshadows the fact that zero rating, no matter how much lipstick you put on it, still puts some companies at a market disadvantage. In a press release announcing YouTube's inclusion, T-Mobile crows that there's now 50 Binge On video partners. But how many video services exist on the Internet? 500? 1000? How many non-profits, educational services, startups, and independents still aren't being whitelisted by T-Mobile's systems? How many even realize they're being put at a market disadvantage to bigger companies?

By opening the door to zero rating a sliver, we've opened the door to fundamentally changing how Internet business works. That's why numerous regulators in India, Japan, The Netherlands and elsewhere have banned zero rating outright. Here in the States, the FCC, wary of hindering usage cap driven "innovation," decided to let the zero rating story play out, addressing anti-competitive behavior on a "case by case basis." But the FCC has failed to act, and that failure has not only resulted in T-mobile's Binge On (potentially bad), but companies like Verizon and Comcast now exempting their own content from caps (immeasurably worse).

Despite its faux-punk-rock consumer friendly rhetoric, T-Mobile has never been a fan of net neutrality, repeatedly coming out against both net neutrality rules and the FCC's Title II push. Google, once a net neutrality champion, has consistently weakened its position on the subject as it realized it too could benefit from a distorted playing field (especially in mobile).

Because users get "free data" doesn't mean zero rating is a good idea. Because YouTube's now happy that it has a little more control, doesn't make zero rating a good idea. Because users and companies can opt out, doesn't negate zero rating's negative impact on the Internet economy. Because all-too-many consumers, analysts and journalists don't really understand what's happening here doesn't make zero rating a good idea. Setting arbitrary usage caps and then letting some companies bypass them aggressively distorts the entire landscape of the Internet. But because so many folks still don't appear to understand this, we're down the zero rating rabbit hole. And it's not really clear if we're ever coming back.

from the first! dept

At the Mobile World Congress convention in Spain last week, one of the most well-hyped products in convention history was something that doesn't technically exist. Fifth generation wireless (5G) was all the rage at the show, with multiple carriers promising they were in various stages of bringing the new ultra-fast wireless standard to consumers. The problem is that while engineers have a general idea of some of the technologies that may be included in the final standard when approved, nobody actually knows what 5G is yet. And when it does finally get solidified, it's likely to be 2020 or later before actual launches occur.

For marketing departments, this apparently wasn't a problem, but an opportunity. Verizon immediately set to work well ahead of any standard ratification, telling anybody who'll listen that the company has begun trialing 5G wireless service capable of 1 Gbps, with deployment scheduled for sometime in 2017. That resulted in a lot of press outlets crowing that we'll be enjoying wireless service faster than Google Fiber in just a few years. But to be clear, Verizon's testing a lot of technologies that may or may not be part of 5G, including beam forming, NFV and SDN integration, and millimeter wave technologies.

But these early trials (focused mostly on fixed, not handset, 5G) overshadow the fact that there's still multiple global partners and a wide variety of coalitions debating what the standard will even look like. A hard standard isn't actually expected to emerge until 2018, with actual real-world deployment not expected until 2020 (which in telecom terms means 2021 or 2022). Verizon competitor T-Mobile isn't mincing words when it comes to what Verizon's up to:

"We're starting to see a lot of news starting to form in and around the 5G space," T-Mobile CTO Neville Ray said during a conference call to discuss the carrier's quarterly earnings. "I think folks have seen some of the earlier announcements, and you know, Verizon trying to move and saying they're going to be the first to 5G, well, it's kind of BS, to be honest."

Entertaining T-Mobile CEO John Legere was a little more blunt in his assessment of Verizon's planned 2017 5G "launch":

"That's pure horseshit; it's not going to happen," Legere said on the call. "Either (McAdam) doesn't know, or what they're attempting to do is what they've done before several times, to connect the current (capabilities) to a long-term strategy for 5G, but call it 5G way before the standards or the handset capabilities are available."

Why's Verizon marketing 5G so hard, so early? As competitive pressure from T-mobile has grown, Verizon has found it harder and harder to avoid having to compete directly on price. Verizon avoids direct price competition like a chatty, annoying party attendee, arguing price competition isn't necessary because Verizon has the superior network. But as T-Mobile's network has gained ground, Verizon's argument has started to run out of runway. Enter 5G: something Verizon can "beat" the other carriers at even if nobody actually knows what the race track even looks like:

"We’re so far away from it, it’s not even funny,” Recon Analytics’ Roger Entner said. “There is a lot of prep work going on, but to a certain extent this all reminds me of a toddler wearing a Harvard class of 2035 bib. So we have to be measured with our enthusiasm.”...“In a marathon run, we’ve barely passed the 100 meter line,” Entner said. “It’s way too early (to tell who’s ahead), so everybody is just saying ‘Hey, we’re out of the starting blocks, look at us.’ But all of them are neck and neck with each other."

Ah, marketing. That's not to say 5G doesn't offer some major reasons to be excited, and it will usher forth the start of wireless actually being a stronger fixed-line broadband alternative. But with the kind of pricing companies like Verizon have pushed with their 4G services, whether you'll be able to afford the next-generation leap is another question entirely. And given that the United States currently sits 55th in terms of overall current 4G LTE speeds, 5G's potential doesn't mean U.S. carriers should get too far ahead of themselves.

The 51-page report by van Schewick details the problems with Binge On in great detail, noting that it falls afoul of the FCC's transparency rules, that it unfairly picks winners and losers and that it harms competition. The core argument:

Binge On undermines the core vision of net neutrality: Internet service providers (ISPs) that
connect us to the Internet should not act as gatekeepers that pick winners and losers online by
favoring some applications over others. By exempting Binge On video from using customers’ data
plans, T-Mobile is favoring video from the providers it adds to Binge On over other video.

T-Mobile says that it does not intend to become a gatekeeper on the Internet: It says Binge On is
open to all legal video streaming providers at no cost, as long as they can meet some “simple
technical requirements.” The idea is that any discriminatory effects of Binge On disappear as more
providers join the program. However, the technical requirements published on T-Mobile’s website
are substantial. They categorically exclude providers that use the User Datagram Protocol (UDP),
making it impossible for innovative providers such as YouTube to join. They discriminate against
providers that use encryption, a practice that is becoming the industry standard. While some
providers can join easily, a significant number will need to work with T-Mobile to determine
whether their service can be part of Binge On. Many will have to invest time and resources to
adapt their service to T-Mobile’s systems. The smaller the provider, the longer it will likely take
for T-Mobile to get to it.

The result: Binge On allows some providers to join easily and creates lasting barriers for others,
especially small players, non-commercial providers, and start-ups. As such, the program harms
competition, user choice, free expression, and innovation.

What's perhaps even more interesting is that van Schewick includes in the report alternatives that T-Mobile could have adopted that would have created similar plans that actually benefit consumers without messing up net neutrality:

Binge on in its current form violates net neutrality. However, T-Mobile could offer alternative
innovative plans that benefit customers and allow the ISP to compete without violating net
neutrality. For example, T-Mobile could offer customers a zero-rated low-bandwidth mode at the
same speed as Binge On, but contrary to Binge On, customers would be able to use this mode to
watch video or do anything else online. It would be their choice.

Alternatively, T-Mobile could allow customers unlimited access to the entire Internet after
customers reach their cap, just at a slower speed – the same speed currently offered through Binge
On. After reaching their cap, customers could watch video or do anything else online; again it
would be their choice. This option offers customers truly unlimited video, unlike Binge On.
Contrary to advertising, Binge On video is limited: Customers can watch video included in the
program only until they reach their monthly data cap through other Internet uses that are not zerorated.
As such, advertising Binge On as “unlimited” video might violate the FCC’s transparency
rule, which requires ISPs to accurately describe their service. In contrast, this alternative option
would allow T-Mobile to offer “unlimited video streaming” that stands up to its name and respects
net neutrality.

Finally, T-Mobile could increase the monthly data caps on its capped plans to account for the
average amount of video that people are watching. Customers could use that additional bandwidth
to do anything online, including watching video. Again, it would be their choice. All of these
alternative plans are entirely consistent with net neutrality.